Brazil’s Cardoso to Modify Austerity Plan

Brazilian President Fernando Henrique Cardoso agreed with lawmakers to six changes in a package of measures aimed at narrowing Brazil’s public deficit by about $20 billion. In return for a commitment from his allies in Brazil’s Congress to support the package, Cardoso surrendered to their demands on some crucial provisions such as an across-the-board income tax increase. Unspecified tax increases on fixed-income investments will make up for other taxes that will be eliminated. Under terms of the agreement, the income tax will be increased only for people who earn more than $1,622 a month. Cardoso also agreed to strike proposals to eliminate certain regional corporate tax breaks that had provoked fierce opposition in the Brazilian Congress. The body is expected to vote next week.